Berkshire News Briefs - 7/1/15

Geico Nabs a Film Grand Prix at Cannes -- With a Pre-Roll Ad (Ad Age)

In a move that may spark a welcome sea change in the snooze-worthy arena of pre-roll advertising, the Cannes Lions International Festival of Creativity Film Jury awarded one of its top prizes to a mold-breaker in the category: a spot from Geico's "Unskippable" campaign that dares viewers to try and stop watching ads in which "nothing" happens. [...]

Geico topped the Non-Television category. Its pre-roll, "Family," created by The Martin Agency and directed by Park Pictures' Terri Timely, put a hilarious twist on the typically boring genre and features a family sitting at the dinner table with the Geico logo plastered boldly in the middle of the frame. Seconds into the ad, a voice-over announces, "You can't skip this Geico ad because it's already over," and mid-action, the family stops, except for the dog, who proceeds to devour every bit of food on the table. Although nothing much happens beyond that, the ad gets progressively funnier since it's blatantly obvious that the actors in the scene are simply holding their poses as the dog carries on.

Here's the extended version of GEICO's winning ad:

There's more of them in the series, if you play that one to the end and then watch the next suggested videos. GEICO is one of the few companies that I can waste 20 minutes on YouTube just watching their hilarious ads. This one is another current favorite of mine:

Warren Buffett's Berkshire Hathaway Expands in Australia, Opens New Zealand Office (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. is adding an office in New Zealand and expanding its operations in Australia as part of a push to sell more commercial insurance globally.

The specialty-insurance unit is underwriting property and casualty coverage through a new office in Auckland, the company said Monday in a statement. Berkshire also announced it will sell policies to hospitals and medical practices in Australia, led by former American International Group Inc. executive Tony Bainbridge.

With Kraft Heinz merged, now comes the cutting (Chicago Tribune)

(Berkshire Hathaway is the majority shareholder of Heinz.)

Kraft Foods Group shareholders voted Wednesday to approve the company's sale to H.J. Heinz, a deal that brings together two storied packaged-food companies vying for attention as consumers look for healthier, fresher fare. [...]

More than 98 percent of votes cast were in favor of the transaction, representing over 69 percent of all outstanding Kraft shares, Corporate Secretary Kim Rucker told the small group. [...]

The acquisition may lead to heavy job losses as Kraft and Heinz — which have each already trimmed their ranks in recent years — try to cut $1.5 billion in annual costs. [...]

On Monday, the companies announced that many of Kraft's top executives, including Chief Financial Officer James Kehoe, will leave the food maker soon after the deal is completed.

Utilities commission approves TransAlta plant near Wabamun (Edmonton Journal)

TransAlta’s new gas-fired electricity plant near Wabamun got a green light from the Alberta Utilities Commission, which dismissed concerns about increased air pollution into the Edmonton area.

Sundance 7 — an 856-megawatt plant — is a joint venture with Warren Buffett’s Berkshire Hathaway Energy Company and could come on stream in 2018, according to the AUC ruling.[...]

TransAlta notes that gas-fired electricity is less polluting than coal-fired plants and the company intends to shut down two smaller coal units in 2019.

Berkshire Hathaway Inc. is Expected to Report $N/A for QN/A (The Markets Daily)

Remember kids, if you're going to use Mad-Libs computer programs to write your business news, be sure to hire a human editor.

Wall Street analysts expect Berkshire Hathaway Inc. to report earnings per share of $N/A for the current fiscal quarter. This number is based on the average estimate of the sell-side research firms that cover the stock. Berkshire Hathaway Inc. most recently reported earnings per share of $N/A on N/A for the quarter ended N/A.

This number was N/A away from what analysts had expected, a difference of N/A%.

Warren Buffett is now the world’s richest cartoon character (MarketWatch)

[...] Already known as one of the most famous investors in the world, the Oracle of Omaha has become celebrated of late among the grade-school set for his work with the Secret Millionaires Club, an animated program that teaches kids about finance. [...]

Since its relatively low-key inception in 2009, the series has grown to encompass a full slate of “webisodes” and half-hour TV programs (the show has aired on The HUB cable network, now the Discovery Family Channel; a new network partner is expected to be announced soon). Additionally, it has spawned a book, DVDs and “business in a box” kits that help youngsters start their own small-scale enterprises.

Berkshire News Briefs - 5/22/13

Berkshire filed its quarterly 13F statement with the SEC this week, which discloses which other public companies it owns shares in.

In summary:

New additions: Starz (STRZA) and Chicago Bridge & Iron Company (CBI). (Starz is not really a purchase; BRK received the shares when Starz was spun off from DirecTV in January.)

Big purchases (percentage-wise): 41% increase in National Oilwell Varco (NOV) and 121% increase in Verisign (VRSN)

Also big purchases (volume-wise): Wells Fargo (WFC), Walmart (WMT), DirecTV (DTV), and DaVita (DVA)

Smaller purchases: IBM (IBM), US Bankcorp (USB), and Wabco (WBC).

Large sales: 46% of BRK's Mondelez (MDLZ) shares, a 100% sale of Archer Daniels Midland (ADM), and a 100% sale of General Dynamics (GD).

Smaller sales: Kraft (KRFT) and Bank of New York (BK).

With His Magic Touch, Buffett May Be Irreplaceable for Berkshire (NY Times)

The ability to make acquisitions on favorable terms is a testament to Mr. Buffett’s personality and skills as a deal maker. It also highlights an almost unsolvable problem for his company, Berkshire Hathaway, and its shareholders. When its 82-year-old chief executive is gone, who will negotiate such sweet deals? [...] The Heinz deal aptly illustrates the huge issue looming for Berkshire shareholders. Simply put, Mr. Buffett negotiated a deal almost no one else on the planet could have received.

S&P downgrades Berkshire Hathaway's credit rating (Bloomberg)

Warren Buffett's Berkshire Hathaway Inc. was downgraded by Standard & Poor's Ratings Services Thursday after the credit rating agency changed the way it evaluates insurance companies. [...] S&P said Berkshire's insurance companies, which include Geico and major reinsurance firms like General Re, are riskier than other insurers because their large equity investments that can be volatile. And the ratings agency said insurance regulators could restrict how much money Berkshire's insurers send to the holding company. The ratings agency also said management succession is a concern at Berkshire. [...] S&P said its rating reflects Berkshire's strong financial risk profile and strong balance sheet, and Berkshire still enjoys the highest rating of any insurance company.

The Fool's John Reeves (TMFBane) says that this is The Berkshire Hathaway Story Nobody Cares About (Fool Video)

Buffett Jets Chief Says U.S. Leads Private-Flight Rebound (Bloomberg)

NetJets caters to wealthy individuals and business clients who take a stake in planes in exchange for flight hours. When the U.S. financial crisis sapped luxury flying, the company cut jobs and planes before embarking on $17.6 billion of orders starting in 2010 on a bet that the market would recover over the coming decade. The number of new NetJets owners increased 55 percent in the first quarter from a year earlier, Hansell said. Regarding the U.S. market, he said: “I wouldn’t say it’s a huge upswing, but it’s year over year over year, from 2009, been an improvement.”

Warren Buffet Pumps $1.9 Billion Into Iowa Wind Power (Clean Technica)

The new investment will add up to 656 new turbine’s to the wind portfolio of MidAmerican Energy, which has already pumped 1,267 turbines into Iowa since 2004 (Buffet’s affection for wind power is active in other states as well, by the way). When the new turbines are operating the company expects to produce 39 percent of its retail generation from wind power. In comparison, by the end of 2011 the company’s energy mix was dominated by coal at 47 percent, with wind coming on strong at 26 percent. Another 20 percent came from natural gas and oil, with nuclear, hydro and “other” combining for the remaining 7 percent.

1 Thing I Wish Warren Buffett Had Said (Fool)

During the multi-hour question-and-answer session during the Berkshire Hathaway annual meeting, there was plenty that Warren Buffett and his partner-in-crime Charlie Munger said. But what didn't Buffett say? To find out, I rounded up the group of Fools who attended the Berkshire meeting this year and asked them exactly that. So, Fools, what do you wish Warren had said?

Contest turns kids, teachers into Berkshire Hathaway shareholders (Omaha World-Herald)

“The kids were terrific,” Buffett said Monday after getting sales pitches from five individual and three team finalists in a nationwide contest related to the Secret Millionaires Club, an animated series that teaches children about finances. “They're all winners.” Buffett, who voices his cartoon character in the series, didn’t pick the winners, announced Monday at a luncheon at the Embassy Suites hotel in Omaha’s Old Market. But he backed up his praise by pledging to give 10 shares of Class B stock in Berkshire to each student and the teachers who coached them. That’s about $25,000 worth, altogether, at today’s price. The winning individual and team also received $5,000 from the contest.

Warren Buffett plays salesman-in-chief for Berkshire Hathaway while selling Dairy Queen treats (Washington Post)

Billionaire Warren Buffett isn’t just Berkshire Hathaway’s chairman and CEO. He’s also the chief salesman. Buffett visited a Dairy Queen in Ralston, Neb., Monday evening to serve up the restaurant chain’s new S’mores Blizzard flavor that will be available nationwide June 1. Then he ate ice cream for the cameras.